The board of directors of Indesit Company (Fabriano, Italy) approved the consolidated figures for the first quarter, which closed with sales of 668 million euros (approx. U.S. $849.5 million), a gross operating margin of 10.1 percent, and net operating income of 28 million euros (approx. $35.6 million).
Sales for the quarter were down 8.5 percent compared the same period in 2004. Gross operating income amounted to 67 million euros (approx. $85.2 million), compared to 83 million euros (approx. $ 105.6 million), in first quarter 2004.
The net operating income margin over sales was 4.2 percent, reflecting rises in raw materials costs, especially steel and plastics, and the decrease in revenues in the quarter, Indesit said.
The company said that in addition to being traditionally a low season, the first quarter was penalized by the difficult situation affecting the entire sector and persistently strong pressure on prices. The contraction in sales experienced by white goods makers and the company’s policy on value caused a decrease in sales partly offset by higher unit revenues, Indesit said.
The appliance maker added that it was, however, able to achieve average revenues per appliance that reversed the trend and rose by 1 percent on first quarter 2004 and 2 percent on fourth quarter 2004.
Indesit also said it is implementing measures to consolidate its leadership in Europe. In terms of revenues, it reacted to pressure on volumes by selectively modifying its pricing policy and planning new product launches to coincide with seasonal spending highs. The Ariston Experience line’s European road show now coming to an end will be followed up by new cooling products and in the summer period by the Ariston and Indesit large size ranges. This strategy is expected to keep 2005 sales in line with 2004.
On the costs front, the company confirms that targets for industrial efficiency improvements and containment of expenses set at the start of the year will be met.
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